This is indeed a substantial market and a significant growth. But…the combined wireless revenues of mobile operators in US were roughly USD153 billion in 2009, or USD535 per user (Source: CTIA).

Assuming mobile operators would get a 50% share (remember now, fixed operators’ share of advertising on internet over their “pipes” is 0%) the share of mobile advertising spend of the total revenue cake would thus be 0.2% in 2010 and (assuming a fairly stable revenue base until 2013) 0.5% in 2013. Using the same CAGR as forecasted between 2010 and 2013 (38%) it would take mobile advertising until 2020/2021 to reach 5% of the total revenue.

Given that many analysts, including ourselves, expect a decline in voice revenues for operators one question on the table is whether advertising will make up the difference. The above exercise indicates it won’t…

– Mobile advertising will not offset voice revenue decline. They don’t play in the same ballpark
– Time and investments are better spent on efforts in delivery efficiency and operations streamlining for core services and other access related aspects
– But when spending time and effort on mobile advertising (which should be done, don’t get us wrong), e.g. through utilizing assets in UDM, this should not be limited to target mobile advertising but also to augment and optimize other services

So, you go for that tempting money on the table but never ever lose focus on the key assets.

I cannot get this Google tax idea out of my head. It was announced this week that Vodafone joins Telefonica and other big Telcos in lobbying efforts to get EU approval to charge on-line content providers for the services they provide to Telco customers. The supposed logic is that these on-line services generate so much [...]Read more